As Q2 Earnings Date Draws Nearer, Should You Buy AMD Stock?

  • Since reporting record Q1 revenue in May, Advanced Micro Devices (AMD) stock has slipped 18%.
  • On Friday, AMD stock sank to $81.57, a new 2022 low close, and has dropped 46% so far in 2022.
  • With AMD expected to report Q2 earnings in a month, now may be a good time to buy AMD stock.
AMD stock - As Q2 Earnings Date Draws Nearer, Should You Buy AMD Stock?

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On Jun. 17, Advanced Micro Devices (NASDAQ:AMD) stock set an unfortunate new record for 2022. With its Friday close of $81.57, AMD stock is at its lowest point in 2022. It’s down nearly 46% so far in 2022 and shares are at prices not seen since last June.

AMD shares have fallen victim to the long list of economic concerns that have battered markets in 2022. Chief among those are war, rising interest rates, inflation, and fear of a recession. Many of AMD’s products — from PC processors to graphics cards and the custom chips found in game consoles — could feel the impact if a recession hit and consumers cut spending. 

In addition, PC sales that found new life during the remote work stage of the pandemic have begun to slide once again. AMD may be gaining market share with its Ryzen PC processors, but with that market shrinking, it takes a little luster off the accomplishment. 

All of this may not make for a strong argument for buying AMD stock. 

However, this is not just any tech company. AMD shares were the top performer in the S&P 500 in 2019 and it put on a very strong showing for the next two years, as well. Priced this low, there is a lot of room for gains to return to 2021 levels. The next potential catalyst to kick off a recovery is just a month away, when the company reports its second quarter (Q2) earnings. If your portfolio could use a high-growth stock, AMD stock is a buy at this price — assuming you are looking long-term. 

Ticker Company Price
AMD Advanced Micro Devices, Inc. $85.08

AMD Analyst Day Showed the Road Map to Ongoing Growth

How do we know that Advanced Micro Devices is positioned to continue delivering growth? It’s not unheard of for a company to put up impressive numbers for a few years, then lose momentum when it falls into the trap of coasting.

I have no reason to suspect that AMD is going to rest on its laurels. To drive the point home, the company recently held its annual Financial Analyst Day.

There, AMD:

“[…] outlined its strategy to deliver its next phase of growth driven by the company’s expanded portfolio of high-performance and adaptive computing products spanning the data center, embedded, client, and gaming markets.”

The company announced architecture roadmaps for new CPUs, graphics cards, and adaptive computing. AMD sees its addressable market as being worth $300 billion. And as InvestorPlace contributor Larry Ramer reported, the company is confident in its ability to deliver 20% annual sales increases.

With AMD shares worth half of what they were last November, this makes a strong case for buying AMD stock.

Don’t Overlook the Metaverse 

Don’t make the mistake of overlooking the metaverse when it comes to AMD — especially in areas like data centers. I’ve written before about the fact that few people mention AMD when it comes to the metaverse. Other tech companies tend to get the spotlight. But make no mistake, if the metaverse takes off as expected, Advanced Micro Devices will be one of the companies that benefits in a big way.

And so will AMD stock. 

Bottom Line: Should You Buy AMD Stock?

Through 2022, AMD stock has rallied after earnings. After Q4 2021 was reported in February, AMD shares shot up 14% over the next week. When the company reported its Q1 2022 earnings in May — with record revenue — it was a single-day 9% pop.

However, in both cases, the rallies were short-lived. Odds are that the same pattern will repeat after the company reports Q2 earnings in July.

Whether Q2 earnings turn out to be the rally catalyst that sticks this time or not, AMD stock at current prices is awfully tempting. You will have to ride out some volatility as the economic concerns of 2022 continue to roil the market. However, the long-term growth potential of AMD stock makes it a lot easier to overlook any risk of potential disappointment in the short-term.

On the date of publication, Louis Navellier had a long position in AMD. Louis Navellier did not have (either directly or indirectly) any other positions in the securities mentioned in this article. InvestorPlace Research Staff member primarily responsible for this article did not hold (either directly or indirectly) any positions in the securities mentioned in this article.

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